The Cabinet decision reiterating revision and near doubling, from April next, the price of domestic natural gas is timely. The move would better align relative prices, coagulate much-needed funds in the high-risk upstream hydrocarbon sector and shore up investor sentiments. In the promising Krishna-Godavari basin in the eastern offshore, Reliance Industries (RIL) has had significant production shortfall for over three years now, and it would reportedly need to furnish a bank guarantee to counter perceptions that it is hoarding gas at its operational blocks. The revised gas price would be as per the Rangarajan committee formula, benchmarked to the going average price of what producers get elsewhere in the main markets. Continue reading Revised Natural Gas Pricing Better for Indian Economy
Category Archives: Energy
KSK Energy Ventures to increase Wind Energy Projects in India
KSK Energy Ventures may raise funds up to Rs 1,200 crore debt to finance wind energy projects across India, according to sources. KSK Energy Ventures currently has about 71 MW wind energy projects under operation, is looking to set up additional 250 MW projects by the next wind season, which would be May 2012. It is believed that KSK is discussing with multiple suppliers, including Chinese suppliers like Dongfang, Shanghai Electric in China and Suzlon Energy in India, for the wind energy machinery.
The cost per MW of wind energy is about Rs 5.5 to 6 crore. So about Rs 1,500 crore would be required for this project on 80% debt and 20% equity basis. The company prefers to raise the debt though Dollar Denominated Debt, a source told PTI. Continue reading KSK Energy Ventures to increase Wind Energy Projects in India
Government of India – 25 GW solar energy mission 2023
The Government of India recently announced a 25 GW solar mission plan which is to be implemented in three phases by 2023. The first phase is of 1000 MW by 2013, the second phase is 9000 MW by 2018, and the balance by 2023. The tariff from these solar plants would be as per CERC regulation and the proposal is that all the power that is generated would be purchased by NTPC‘s trading arm NVVN. Some of the key updates of the National Solar Mission are as follows. Continue reading Government of India – 25 GW solar energy mission 2023
Indian Oil Corp (IOC) To Enter Nuclear Power Projects
Indian Oil Corp will do nuclear power generation. IOC, a Fortune 500 company and India’s largest oil refiner-marketer with $58 billion (Rs. 2,85,337 crore) in sales, has informed the government that it would form a joint venture with Nuclear Power Corporation of India (NPCIL). IOC will hold a stake of between 26 and 49 per cent.
This venture is on the back of the Indo-US nuclear deal, that can help in getting nuclear fuel.
The Nuclear Power projects listed by IOC for joint participation with NPCIL are proposed as follows:
- Rs 14,000-crore nuclear power project at Kakrapar in Gujarat with a capacity of 1,400 mw
- Rs 14,000-crore nuclear power project at Rawatbhata in Rajasthan with a capacity of 1,400 mw
- Rs 18,000 crore project at Kundakulam in Tamil Nadu for 2,000 mw
- Rs 28,500 crore project at Jaitpur in Maharashtra for 3,300 mw
So, a total of 8,100 MW of nuclear power projects are planned.
IOC’s chairman and managing director Sarthak Behuria said:
This is a step towards becoming a integrated energy major.” “We have held preliminary discussions with NPCIL and are currently working out the modalities.
A senior Petroleum Ministry official said an investment of Rs 220-825 crore per annum would be required depending on the equity option chosen by IOC. Investments would be required for a span of 5 years beginning 2010.
The official said the company has discussed the proposal with the ministry and IOC’s board on Monday approved plans to have a memorandum of understanding with NPCIL. “We have asked IOC to concentrate more on its core area of business which includes refinery, petrochemicals and marketing. It has assured us that the fund requirement for equity participation with NPCIL is comparatively small as compared to the investment in core areas,” the official said.
Source: Hindustan Times
We feel, IOC’s balance sheet should have no problem funding this venture, and in return, IOC will add a long term assured cash flow generating business, that could one day, have its own IPO. This development makes IOC’s stock a Buy on any near term correction.
Scheme of Arrangement between Reliance Infrastructure and its Subsidiaries
Reliance Infrastructure Limited has informed the Exchange that the equity shareholders of Reliance Infrastructure Limited, at their meeting convened pursuant to the Order of the Honble High Court of Judicature at Bombay, held on June 09, 2009 have approved the Scheme of Arrangement between the Company and its wholly owned subsidiaries Reliance Energy Generation Limited , Reliance Goa and Samalkot Power Limited, Reliance Power Transmission Limited, Reliance Energy Limited, Reliance Infraventures Limited and Reliance Property Developers Limited and their respective shareholders and creditors under Sections 391 to 394 of the Companies Act, 1956.
The votes cast in favour of the resolution approving the Scheme were 99.9993% of the total votes cast at the meeting. Further, the Company has submitted to the Exchange the Media Release dated June 09, 2009 titled “Shareholders of Reliance Infrastructure Limited approve the Scheme of Arrangement for Demerger of the following divisions of the Company:
i. Dahanu Thermal Power Station
ii. Goa and Samalkot Power Stations
iii. Power Transmission
iv. Power Distribution
v. Toll Roads
vi. Real Estate to the respective wholly owned resulting companies”.